E25-10 Making special pricing decisions - Accounting
Suppose the Baseball Hall of Fame in Cooperstown, New York, has approached Hungry-Cardz with a special order. The Hall of Fame wishes to purchase 56,000 baseball card packs for a special promotional campaign and offers $0.38 per pack, a total of $21,280. Hungry-Cardzs total production cost is $0.59 per pack, as follows:
Variable costs:
Direct materials	$0.13
Direct labor	0.09
Variable overhead	0.08
Fixed overhead	0.30
Total cost	$0.58
Hungry-Cardz has enough excess capacity to handle the special order.
Requirements
1. Prepare a differential analysis to determine whether Hungry-Cardz should accept the special sales order.
2. Now assume that the Hall of Fame wants special hologram baseball cards. Hungry-Cardz will spend $5,700 to develop this hologram, which will be useless after the special order is completed. Should Hungry-Cardz accept the special order under these circumstances, assuming no change in the special pricing of $0.38 per pack?